CLEVELAND-A federal court dismissed a suit brought by the former CEO of Clyde-Findlay Area CU who was fired in 2011 because of an alleged affair with the director of human resources.
In his suit, Paul Howard, who headed the $120-million CU for 13 years, denied his relationship with the HR director was romantic and asserted his firing was an act of age and sex discrimination and his denial of his Supplemental Executive Retirement Plan benefits breached the terms of the retirement plan.
Court documents show that the CU's CFO, COO and the member business service manager signed a letter to the board in 2010 complaining about the relationship between Howard and the HR director. The two frequently rode together to work, spent a lot of time behind closed doors, engaged in flirtatious behavior, and reportedly acted guilty when people saw the two of them whispering together, according to court records.
A Revealing Letter
In their letter to the board, the three executives said they were "concerned about unprofessional and inappropriate behavior involving the CEO and human resources manager", adding it was "very apparent" Howard and the HR manager were "engaged in a relationship" that violated the Code of Conduct and Ethics Policy, "while also affecting employee morale, creating uncomfortable situations for employees, and creating unnecessary distractions." Because they feared retaliation, they asked the board to keep the information as confidential as possible during any investigation.
After an investigation by the board in which other employees were interviewed, Howard, who was 59 at the time, was terminated. As a result of his termination, Howard was denied benefits under the SERP, which would have paid him $63,178 a year beginning in 2017. His suit asked the court for back pay, $25,000 in damages for emotional distress and anxiety, and reinstatement of his SERP benefits.
No Discrimination
In dismissing the suit, the U.S. District Court for the Northern District of Ohio ruled there was no evidence of either age or sex discrimination by the credit union.
It ruled that Howard forfeited his SERP benefits because he was terminated "for cause." The credit union argued that Howard was terminated because he lost the trust and respect of subordinate managers, including the CFO, and "became an ineffective leader, causing the business to fail to operate as a team," which amounted to "for cause."
Howard's "admissions or failure to deny a number of the contentions regarding his behavior, undisputed evidence his CFO and other employees no longer respected him, and the negative, distracting effect on (the credit union's) day-to-day operations establish a negligent failure to perform his duties as CEO," ruled the court. The credit union's employees, it noted, did not feel comfortable at work, feared retaliation, and managers had to field constant complaints and questions, creating a continual distraction.
